[Housing Price Rebound vs. Further Decline] ⑤ Regulation Easing: 'Positive' vs. 'Premature'... Is the Housing Price Bottom 'Uncertain'?

"1·3 Measures 'Positive' for Market Soft Landing"
Faster Deregulation Raises 'Speculation' Concerns
Housing Prices Bottom "Too Early... Need to See Q2"

Since the 1·3 real estate measures, the decline in house prices has slowed, and there has been a noticeable localized increase in transaction volume. Many experts viewed the policy effects as 'positive' from the perspective of a soft landing in the real estate market. On the other hand, some pointed out that the deregulation might have been premature, warning that a 'second 영끌 (all-in) crisis' could occur. Regarding the recently spreading theory of a housing price bottom, experts said it was merely an 'optical illusion' and predicted that the true 'bottom' would be determined after the second quarter.

Soft Landing of Market Earns 'A Grade'... Concerns Over Creation of 'Speculation Playground'

Ko Jun-seok, CEO of J-Edu Investment Advisory, rated the government’s real estate policies, including the 1·3 measures, as an 'A grade.' Ko said, "Except for the three Gangnam districts of Seoul (Gangnam, Seocho, Songpa) and Yongsan District, deregulation was implemented to induce a soft landing in the market, and real estate transaction volume exceeded 1,400 cases in January this year." He analyzed, "Considering that the base interest rate has not fallen, the policy effects have begun to appear in the market." He added, "Market prices are determined by interest rates and supply," emphasizing, "Regulations need to be further eased."

Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, described the 1·3 measures as a kind of 'warming-up effect.' Park explained, "Interest rates remain high, and factors such as reverse jeonse (rental deposit) problems and economic recession overlap," adding, "Gap investments are out of the question, and the market is only absorbing existing listings, so concerns about the timing of deregulation being premature are unwarranted."

However, there have been criticisms that the pace of deregulation is too fast due to successive policy announcements. Excessive deregulation could send wrong signals to the market. Starting this month, the government has removed residency requirements for so-called '줍줍' (unranked subscription) and allowed multi-homeowners in regulated areas to obtain mortgage loans.

Han Moon-do, Adjunct Professor at Yonsei University Graduate School of Political Economy, criticized, "The government has laid out a speculation playground for young people," warning, "A second 영끌 (all-in) crisis could occur in the future." He questioned, "Most citizens are either single-homeowners or non-homeowners, so why is the government introducing policies favoring multi-homeowners?" expressing concern that "the intensity of deregulation is stimulating speculative sentiment."

Yoon Ji-hae, Research Team Leader at Real Estate R114, agreed that the pace of deregulation is fast but said, "This reflects the significant concerns about a market hard landing." Yoon stated, "If the transaction slump continues this year, related markets and the overall economy, including construction companies, moving companies, and brokerage firms, will lose vitality," adding, "It appears the government has taken early action to prevent a prolonged downturn."

Rising Housing Price Bottom Theory Called an 'Optical Illusion'... Verdict Expected After Q2

Experts unanimously agreed that the recently emerging theory of a housing price bottom is "premature." However, some analyses suggested that the period after the second quarter will be a turning point for direction.

Park Won-gap defined the current situation as a kind of optical illusion, explaining, "House prices are not bottoming out and rising but rather the market is absorbing listings in areas where the price drop was excessive." He said, "In the current real estate market, where good and bad factors are mixed, transaction volume may increase somewhat, especially for small urgent sales," but clarified, "This does not mean the market is warming up; it only means the transaction freeze is slightly easing." He identified the timing of a trend rebound as "when jeonse prices recover," emphasizing that resolving the reverse jeonse problem in the rental market is a priority.

Professor Han Moon-do bluntly stated, "No way," adding, "Price adjustments have not been sufficient." He warned, "If U.S. interest rate hikes continue and inflation is not controlled, house prices could decline for up to five to six years."

CEO Ko Jun-seok said, "The bottom of house prices is a matter of divine territory," but assessed, "We have reached about the knee." He predicted, "A complete bottom will occur when Seoul apartment sales exceed 3,000 cases," expecting the rebound to happen between the second and third quarters of this year. This is because the direction of interest rates will be fully established by then. He also noted, "Although there are about 75,000 unsold houses nationwide, Seoul has fewer than 1,000, and transaction volume is meaningfully recovering," forecasting, "Mortgage loan interest rates are clearly falling, and if the base interest rate drops slightly, the market situation will change further."

Team Leader Yoon Ji-hae said, "We can only clearly identify the bottom after the accumulated inventory is depleted, so it will be clear by the second quarter this year," but added, "It will be difficult to see an upward pattern within this year." However, she set a three-year horizon, explaining, "If we look back three years from now, we might see that current prices were the bottom."